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Seeds For Thought
Putting Your Best Side Forward
Many small businesspeople make a living but not much more. Why? Again, your observation and research should lead you to the answer. What you may find is that many small businesspeople will start a business, build that business to a certain level and then stop. They simply stop. They reach a certain market share and they are satisfied. They fall into a routine.As you observe small businesses in your community, you might see this staleness. You might see the coffee shop that hasn't been redecorated in years. You might notice the service station with the flower beds which for years have only seen tall grass and weeds. You might see the sign shop whose own sign is its own worst advertising. You might see the house painter with paint-splattered clothes driving a paint-splattered van. You might see a beauty shop with dusty plastic flowers because fresh flowers are too expensive and too much trouble to tend. Overall, you might see a pride that once was, now gone. Years ago, these small businesspeople may have been the dynamic entrepreneurs of their day. Now, their days of business adventurism are long past. Their businesses are now simply their jobs. They have allowed their jobs to become work. The fun and excitement and challenge and freshness are long gone. If you take the quiet time each day to think about your business, this should never happen to you. If you run your business from a customer service perspective, this should never happen to you. Your conscience and your customers won't let it happen. Your dynamic attitude toward your business will be constantly renewed. The result will be that your business will continue to grow. You will continue to make more money. You will just be a lot happier.
Here's a simple over-the-hill test. One storeowner is told that there is a Big Brass Band for rent for promotional events. The over-the-hill's store owner's first reaction is, "What? Are you crazy? All that noise? Where will people park? No way." Another storeowner is told that there is a Big Brass Band for rent. She says, "Wow, that sounds great. How can I get in on the action? Maybe, the drum major can hold up one of my signs as they march. I'll have to alert the newspapers and radio and television stations that I'm supporting this promotion." To keep your entrepreneurial spirit rejuvenating:
Here are two examples of promotion. One idea works and the other doesn't. Many small businesses will take a stab at self-promotion by selling T-shirts that are silk-screened with a cute advertising slogan. Sounds like a good idea. And, it would be a good idea if lots of people wore those shirts around town. Who is the better promoter, Sally or Peggy? Sally's Gift ShopP & D Painting CompanyPeggy is also running a cross-promotion with her friend Sue who owns a local ice cream shop. Sue's cost for a small ice cream cone is $0.40. However, she is willing to sell Peggy 100 coupons for small cones for $25.00. Sue is assured of 100 customers who will probably bring other full-priced business with them. Peggy has 100 "Free" ice cream coupons to give to people wearing her shirt. Peggy also organizes a 10K race in conjunction with the local YMCA. The YMCA helps promote the race. Peggy gives a free T-shirt to each entrant. That's 50 shirts. She offers a $100 savings bond to the winner and trophies to the next two finishers wearing her shirt. Of course, the local media covers the event. What is this advertising worth? Peggy and Don are able to charge a premium price for their services because they do an excellent customer-oriented job, and they have plenty of calls for their services because of their promotional efforts. Other Promotional IdeasUnlock your promotional genius. Louie promotes his book shop by giving away free bookmarks at the library. At Mary's Sandwich Shop, she has named the sandwiches after famous people in the town. Carl gives a free self-defense course to women at his karate studio. Bob's Bait and Tackle runs an annual fishing tournament with many prizes. Attorney Sarah Fleisher often represents defendants in high profile cases for reduced fees. Mary's Flower Boutique has a beautiful bouquet of flowers in the lobby of the hospital. Joe's Muffler Shop gives free book covers to the local elementary schools. Arlene's Dance Studio puts on free recitals at area nursing homes. George's Tree Service donated two new trees for the town common. Each promotion carries the potential for free media coverage. Don't miss the opportunity. When you give things away, sometimes wonderful things come back. Andrew Martin, InvestorIn brief, Andy had a deal on a six-unit building. There were four apartments over two stores. The price was $340,000. Andy didn't want to sell the building. He wanted to buy the building himself. He figured the value of the property to be at least $375,000. The owner was a foreigner who wanted a quick sale so that he could return to his homeland. To Andy's mind, this man was a perfect seller. Andy made a downpayment of $20,000 with an agreement that the sale would close within 60 days. He figured that there was no problem. What a deal. Andy was applying for a mortgage at the bank that had financed his three-family. He let the financing process unfold at its usual slow pace. In three more weeks, the appraisal was done. It took another week for the plot plan. Andy called the bank. The bank explained that since this purchase was not to be owner occupied, but strictly investment, that they needed copies of his last three years of federal tax returns. They had to have a rent roster. They requested to see the leases. They wanted to see the occupancy permit for the building. Andy informed the loan officer that the bank had better get its act together. He forcefully explained that his deal had to close in less than three weeks. 
The lawyer was Mr. Dozzier. Andy stated his business, "Mr. Dozzier, my name is Andrew Martin and I'm buying a building at 140 Salem End Road from one of your clients, Mr. Manuel Conrizzen. I need a small favor. My purchase and sale agreement with Mr. Conrizzen calls for a closing in three weeks. Well, you know how slow banks work. I'll have no problem getting my loan but I need at least a 30-day extension." Mr. Dozzier came to the point. "Well, Mr. Martin, I can tell you categorically that any extension is out of the question. In fact, if you default, we have another buyer for the property." Andy couldn't believe what he was hearing, "What do you mean you have another buyer? I'm buying that building, Mr. Dozzier." Mr. Dozzier was polite but emphatic, "Excuse me, Mr. Martin, but you are not buying that building unless we have a certified check for the balance, $320,000, in 18 days." Andy was ready to scream. In fact, Andy did start to scream drawing the attention of the office, "I don't believe this. You mean to tell me that I'm a ready, willing and able buyer and that you're not going to sell me the property? I want Conrizzen's telephone number. What kind of a lawyer are you to turn down a reasonable request from a highly qualified buyer?" Mr. Dozzier was totally unimpressed, "Mr. Martin, again, in plain English, we have another buyer." Andy scoffingly joked, "Who's the buyer, you?" Mr. Dozzier answered, "It's none of your concern, but, yes, I intend to buy the building from Mr. Conrizzen. I concur with your assessment that the building is a solid investment property." "At what price?" Andy demanded. Mr. Dozzier now found it amusing to toy with wildman Andy. "Mr. Martin, that is no concern of yours. You figure the price." Andy's heart was beating a mile a minute. "What about my $20,000 downpayment?" Mr. Dozzier enjoyed rubbing it in. "Since you are a broker, you are well aware that if you close under the terms of your agreement, the deposit money will be applied. Fail to close, and the money is forfeited." Andy was sweating big time. "Forfeited? And, you use my twenty grand to buy the building for $320,000? Dozzier, you're a crook..." Mr. Dozzier hung up with a smile in his voice. "Good day, Mr. Martin." With these two disasters unfolding simultaneously, Andy was not in the best of moods. He couldn't work. He could only boil. And, no one in the office was excluded from every detail of the injustices being perpetrated on poor Andy. "Davis that crook. Dozzier that crook. We'll have them both in court. You wait and see. Take my word for it. Who do these people think I am, a complete chump? These people will find out who they're dealing with, and soon." Following this tirade, Mr. Taylor called Andy into his office. Mr. Taylor patiently started. "Andy, let's cut out the self pity. You've had two very successful years. OK, you've hit a bad time but come on, how bad is it? This type of thing is always going to happen in our business. You've got to take the time right now to re-evaluate. The way you're acting now, if you continue on like this, you'll have destroyed everything you worked so hard to build. Your performance two nights ago was a disgrace both to yourself and the company. I've had calls from several people already, Davis included." Andy waved off the mention of Davis' name, "Mr. Taylor, don't take his side, don't mention Davis to me, that..." Mr. Taylor said firmly, "Andy, this is just the kind of self-destructive attitude I'm talking about. Newton isn't New York City. Everybody knows everybody here, for good or for bad. Word travels fast. When you were good, the good news traveled fast. When you act like a spoiled fool, that gets around even faster. Do you understand me, Andy?" "Yes, Sir." Mr. Taylor continued, "The 100 Washington Street deal is done. Over. Whatever you think of Davis, Davis is in the right. He knows that. I know that. You know that. It's done. Forget it. We're not suing anyone. Make up your mind right now to concentrate on the future. Are you here for the quick buck or for a long successful career? You tell me. You had your chance to put a deal together with Ben but you went for the long dollar and you lost. All right, you lost. The world is still turning, Andy. Learn the lesson, son. What do you stand to gain by alienating Ben Davis? What do you stand to lose making him an enemy?" Andy sighed, almost relieved. "Of course, you're right. I'm sorry, Mr. Taylor."
Mr. Taylor held up his hand, "Don't tell me you're sorry, Andy, tell him. I don't want you to be sorry. I want you to be smarter because of this experience." "Yes, Sir. I'll apologize to him." Mr. Taylor moved to his next point, "Fine, now, Andy, this Salem End Road deal of yours..." Andy started to explain his dilemma. "Mr. Taylor, I'm really bummed out about this. I'm going to lose my $20,000." Mr. Taylor offered some hope. "Maybe not, and, if you don't lose the money, you can thank Don Nardo. Yesterday, after you went home, Don and I talked about your deal. It's an excellent deal but, in your haste to grab this bargain, you painted yourself into a corner with this 60 day closing provision." Andy shook his bowed head. "Yes, Sir, I can see now that was stupid." Mr. Taylor chose a softer approach, "Well, Andy, I wouldn't say stupid. You saw an opportunity and you went for it. Nothing wrong with that. The stupid part was not staying on top of the financing. Follow through, son. You know that. Follow through." Was Andy finally learning humility? "Yes, Sir, I know that. I should have concentrated on staying on top of my own deal." Mr. Taylor couldn't argue, "Yes, you should have. You're trying to work on too many deals at once and as a consequence your follow through is getting shoddy. But, that's a whole separate matter. For now, let's concentrate on Salem End. Don and I might have a way out for you ..." Andy couldn't seem to stop long enough to listen. "Excuse me, Sir, I don't want to waste your time or Don's. My only way out is to buy the building. That lawyer, Dozzier, is a crook. He's going to use my $20,000 to buy the building himself..." Mr. Taylor waited for silence and continued, "Please, Andy, just be quiet for a minute and listen. You used to be a good listener. Now listen. And, for heaven's sake, stop this name calling. You aren't the only real estate genius in the world capable of spotting a good opportunity. The Salem End building is a good opportunity. If you fall on your face, why shouldn't this Mr. Dozzier pick up the pieces? I would. You would. Right now, you must stop blaming other people for your problems and start accepting responsibility." Andy slumped into a chair admitting defeat and getting wiser at the same time. "Again, you're right, Mr. Taylor." Mr. Taylor continued. "Andy, action speaks louder than words. You've got a bright future in this business but not if you don't learn your lessons. You will be tested again and again. If you're strong and can take a few hard shots, you've got a good chance to make it wherever you want to go in the business world. If you buckle to your knees, whimpering every time you're hit, you won't last. From your performances the last few months, don't think there aren't more than a few people anxious to see "Hot Shot Andy" knocked to the canvas. What are you made of, son? Right now, I'm not sure that I know. I'm not sure, right now, that you know. Think about it. You're at a crossroads in your life and you've got to make a move. It's going to be one way or the other." Andy seemed genuinely remorseful. "I'll think about it, Sir. Thank you." Mr. Taylor was ready to build Andy back up, "Andy, in a short period of time, you've done a lot for this company. You've helped me. You've helped Don. Everybody. We all have new energy. We all want to see you back on track. Now, let's do it. Now, go out and talk to Don about your Salem End deal. I know he's made some phone calls for you." Don Nardo was an interesting man. Andy hadn't quite figured him out. Don would hardly say a word to anyone in the office but became Mr. Personality when dealing with one of his clients. To Andy, Don seemed depressed a lot. He was still the best income property agent in Newton but Andy had felt that fact really had as much to do with the complacency of all the other agents in Newton as it did to any special skill of Don's. Don was able to make a good living just by virtue of having been in the business so long and providing a reasonable amount of service to his clients. At first, Andy figured Don was a wilting flower in a field of weeds. Andy was wrong. Don never had much to do with Andy and Andy never felt the need to have much to do with Don. Andy didn't need Don. If anything, it was Don who needed Andy. Andy did the bulk of the work and Don's clients got the newsletters, Don's clients got the ISP, Don's clients got to attend the Roundtable meetings. Who needed whom? In fact, Don had sold two of Andy's listings. Andy sat down next to Don's desk. "Don, Mr. Taylor tells me that you may be able to give me some help with Salem End Road." Don had Andy's problem already solved. "Yes, call Herb Marshall, the president of Newton Cooperative, and he'll give you a bridge loan. A bridge loan should solve your problem. He'll be expecting your call." Andy asked for an explanation. "Sorry, Don, but I'm not really clear on bridge loans." Don explained. "A bridge loan is a short term interim loan which will be repaid when you get your permanent financing." Andy was euphoric. "Don, you mean that I can immediately get the money I need?" Don nodded, "That's what you need to save this deal, isn't it, Andy?" Andy was all smiles. "Yes, yes. How did you get the bank to go for this, Don?" Don went over how his strong networking connections paid off, "I've handled the Marshall family real estate for some years now. And, I've had many dealings with the Newton Coop. I told Herb that your deal was solid, that you had one loan with the bank and that you were an up and comer who could be expected to do significant business with the bank in the future and refer a lot more." Andy saw Don was a halo and wings, "And he went for it." Don went on line for Andy, "Well, I'm right, aren't I? The deal is good for the bank and good for you. Now, you understand that the bridge loan will require you to use your three-family as collateral along with Salem End. The bank will release the three-family when the permanent loan is completed. And, the bridge loan won't be cheap. It will probably cost you a point or a point and a half. On a $320,000 loan, a point is equal to one percent or $3,200. A point and a half would be one and a half percent or $4,800. You will be paying this sizable fee plus the regular interest on the bridge loan even if the bridge loan is only used for several weeks. Understand?" Andy didn't care. He was a man saved. "I understand that even paying $4,800 is better than losing my $20,000 downpayment and we both know that Salem End is worth a lot more than the $340,000 I'm paying." Don concurred "Yes, Salem End is a good deal, Andy." Andy seemed genuinely grateful. Don minimized his effort, "You don't owe me anything Andy. I made a phone call. That's all." Andy got his bridge loan and closed on the six-units on Salem End. He now owned two properties. He was back on a roll. But, this time he was much quieter and a lot less hyper. He started concentrating more on his pending deals and less on trying to promise everything to everybody and juggling and fumbling everything. He made his peace with Davis over the 100 Washington Street deal. Davis told him not to worry and that it was all business. The third secretary seemed to have adjusted well and seemed happy with the job. The ISP problems had smoothed out. Don and Andy were talking more about the real estate business. Andy was finally smart enough to start learning from Don.
Andy was also back to reading. Don didn't seem to read that much but Don had twenty-five years of experience to back him up. Andy didn't have twenty-five years of experience. He had to read. Andy hadn't known about bridge loans and it was a bridge loan which have saved the Salem End deal. What else didn't Andy know about that could be used to make or save deals? Andy started to spend a few more nights home reading and studying and a few less nights at the hotel lounge drinking and impressing. Lesson 25 ResourcesGo to Lesson Twenty Six
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